Today the deepwater Gulf of Mexico is experiencing a strong resurgence of exploration and production activity and should reach a new equilibrium in 2013, Wood Mackenzie said in its most recent upstream outlook.
The business analysis firm said the deepwater gulf is an attractive investment region and will remain a vibrant hub in the long term. It estimates that more than USD 70 billion will be spent on exploration in the region by 2030, an amount larger than all the other globally key deepwater provinces combined. From that investment, more than 12 billion BOE is predicted by 2030, adding a value of about USD 30 billion. These results are materially surpassed only by Brazil, the firm said.
Spending of more than USD 20 billion on the drilling of development wells for projects that are already producing is expected through 2015. Spending on subsea and facilities infrastructure will become bigger factors as the development of new projects such as the Jack/St. Malo and Hadrian proceed. The subsea and facilities categories represent USD 27 billion in spending through 2015.
Gulf production has suffered in part because low drilling levels in 2010–2011 could not mitigate natural decline. However, regional production is expected to exceed the peak of 2009 in 2018–2019 at 2 million BOED, the firm said.
An additional 12 billion BOE of reserves are expected to be produced by subsea tiebacks from fields under development, probable developments, and those yet to be discovered by 2017, the firm said. By then, the third party tiebacks are also expected to generate an extra USD 200 million in tariffs annually.
By 2017, 70% of the deepwater Gulf of Mexico’s processing capacity will remain unused although the available amount will be less than that, for technical and operational reasons, the firm said. Demand for processing capacity will come in the form of infill development and tiebacks, with value derived either by operators monetizing their reserves or through tariffs from third party tiebacks.
Obstacles in place are constraints related to capital, equipment, and personnel. The high-profile Paleogene play also still faces substantial technological risk in an ultradeepwater environment involving very poor reservoir qualities.